Rockwell Automation, Inc. · NYSE:ROK
Rockwell Automation — Q4 2020 Earnings Presentation
32 slides from Rockwell Automation's earnings presentation, Nov 10, 2020
Slide 1: Fourth Quarter Fiscal Year 2020 Conference Call
Fourth Quarter Fiscal Year 2020 Conference Call November 10, 2020 PUBLIC 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement THIS PRESENTATION INCLUDES GUIDANCE AND OTHER STATEMENTS RELATED TO THE EXPECTED FUTURE RESULTS OF THE COMPANY AND ARE THEREFORE FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTIONS DUE TO A WIDE RANGE OF RISKS AND UNCERTAINTIES, MANY OF WHICH
Slide 3: Q4 FY20 Results Highlights
Q4 FY20 Results Highlights ▪ Organic sales down (12)% YOY; up 10% sequentially – Logix down at about the company average, led by Oil & Gas – Drives and Motion outperformance in sales and orders – Exceptional order intake for Independent Cart Technology ▪ Information Solutions & Connected Services (I
Slide 4: Q4 FY20 Organic Industry Segment Performance
Q4 FY20 Organic Industry Segment Performance % of Q4 FY20 Q4 FY20 Sales vs. Q4 FY19 Q4 FY20 vs. Q4 FY19 Discrete Automotive down ~20% ~ 25% Down ~10% Semiconductor up high single digits Hybrid Food & Beverage down low single digits ~ 45% Down ~5% Life Sciences down low single digits Tire d
Slide 5: Q4 and Full Year FY20 Organic Sales Growth
Q4 and Full Year FY20 Organic Sales Growth North America EMEA Q4: (11.8)% Q4: (12.3)% Q4 Highlights * FY: (8.5)% FY: (6.5)% • North America decline led by Oil & Gas, Metals, and Automotive • EMEA performance impacted by weak process industries and Tire • Asia Pacific down due to Automotive and Mass
Slide 6: Full Year FY20 Highlights
Full Year FY20 Highlights ▪ Reported sales down (5.5)% YOY; inorganic investments contributed +3.5% ▪ Organic sales down (7.8)% YOY – Logix down (6)% – IS/CS ended the year with ~$400M in organic sales and double-digit orders growth ▪ Adjusted EPS of $7.68; down (11)% YOY ▪ Free Cash Flow of $1B; 11
Slide 7: Full Year FY21 Outlook Highlights
Full Year FY21 Outlook Highlights ▪ Continuing to prioritize employee and customer safety ▪ Assumes gradual recovery continues – First half down YOY, followed by double-digit growth in second half ▪ Organic sales growth of ~5% YOY at the guidance midpoint ▪ Acquisitions completed in FY20 and FY21 to
Slide 8: FY21 Organic Industry Segment Outlook
FY21 Organic Industry Segment Outlook % of FY21 FY20 Sales Vs FY20 Assumptions at Guidance Mid-Point Discrete Up mid Automotive up ~10% ~ 25% single digits Semiconductor up mid single digits Hybrid Food & Beverage up mid single digits Up mid ~ 40% Life Sciences up ~10% single digits Tire u
Slide 9: Q4 FY20 Key Financial Information
Q4 FY20 Key Financial Information ($ in millions, except per share amounts) Q4 2020 Q4 2019 YOY B/(W) Organic Growth (12.1)% Inorganic Growth +3.1% SALES $1,570 $1,730 Currency Translation (0.3)% Reported Growth (9.3)% SEGMENT OPERATING MARGIN 20.2% 20.2% 0 bps GENERAL CORPORATE - NET $22 $36 $14 AD
Slide 10: Q4 FY20 Segment Results
Q4 FY20 Segment Results (in millions) SALES SEGMENT OPERATING HIGHLIGHTS ($ in millions) MARGIN • Organic sales up ~10% sequentially • Segment operating margin up YOY despite impact $702.8 27.2% of lower sales ARCHITECTURE Organic (11.3)% +100 bps YOY & SOFTWARE Inorganic +1.3% Currency —% +340 bps
Slide 11: Q4 FY19 to Q4 FY20 Adjusted EPS Walk
Q4 FY19 to Q4 FY20 Adjusted EPS Walk ~$(0.15) ~$(0.05) ~$0.05 ~$0.00 ~$0.00 $2.01 $1.87 FY19 Q4 Core FX Tax Rate Interest & Shares Acquisitions FY20 Q4 1 (excl. Interest) 1 Sensia within acquisitions consists of the incremental operating earnings, intangible amortization, transaction fees, setup cos
Slide 12: Full Year FY20 Key Financial Information
Full Year FY20 Key Financial Information (in millions, except per share amounts) 2020 2019 YOY B/(W) Organic Growth (7.8)% Inorganic Growth +3.5% SALES $6,330 $6,695 Currency Translation (1.2)% Reported Growth (5.5)% SEGMENT OPERATING MARGIN 19.9% 22.0% (210) bps GENERAL CORPORATE - NET $99 $109 $10
Slide 13: Q2-Q4 FY20 Global Daily Average Product Order Trends
Q2-Q4 FY20 Global Daily Average Product Order Trends $ January February March April May June July August September Impact of large Independent Cart Technology order booked in September PUBLIC| Copyright ©2020 Rockwell Automation, Inc. | 13
Slide 14: Fiscal 2021 guidance
Fiscal 2021 guidance Full year outlook Sales Midpoint ~ $6.8B Organic Growth Range 3.5% - 6.5% Inorganic Growth 1.0% - 1.5% Currency Translation ~ 1% Segment Operating Margin 20.0% - 20.5% Adjusted Effective Tax Rate ~ 14% Adjusted EPS (new definition) 1, 2 $8.45 - $8.85 Free Cash Flow as a % of Adj
Slide 15: Fiscal 2020 to Fiscal 2021 Midpoint Adjusted EPS Walk
Fiscal 2020 to Fiscal 2021 Midpoint Adjusted EPS Walk ~$(1.15) ~$1.90 ~$0.10 ~$(0.15) ~$0.10 $0.19 $8.65 $7.87 $7.68 FY20 Actual - Purchase FY20 Actual - Core Incentive FX Tax Rate Acquisitions FY21 Guidance Old Definition Accounting New Definition Compensation/ (excl. Interest) Midpoint Temporary A
Slide 16: Capital Deployment Framework
Capital Deployment Framework PUBLIC| Copyright ©2020 Rockwell Automation, Inc. | 16
Slide 17: New Operating Segments to Simplify and Accelerate Profitable Growth
New Operating Segments to Simplify and Accelerate Profitable Growth 2020 Total Fiscal Year Sales and Product Available Market (PAM) $2.8B ARCHITECTURE ~$25B PAM & SOFTWARE SERVICES (10%) LIFECYCLE SERVICES $1.7B SOLUTIONS INTELLIGENT (24%) DEVICES $2.9B PRODUCTS (66%) SOFTWARE & CONTROL $1.7B ~$35B
Slide 18: Appendix
Appendix Supplemental Financial Information and Reconcilations to Non-GAAP Measures 18
Slide 19: New Operating Segments Composition
Former A&S business New Operating Segments Composition Former CP&S business Intelligent Devices Software & Control Lifecycle Services ▪ Drives ▪ Control software & hardware ▪ Consulting ▪ Motion ▪ Visualization software & hardware ▪ Professional services Solutions ▪ Safety ▪ Digital twin & simulat
Slide 20: FY20 Organic Industry Segment Performance
FY20 Organic Industry Segment Performance % of FY20 FY20 Sales vs. FY19 FY20 vs. FY19 Discrete Automotive down mid single digits ~ 25% Down ~5% Semiconductor up mid single digits Hybrid Food & Beverage down low single digits ~ 40% Down ~5% Life Sciences down low single digits Tire down dou
Slide 21: Q4 FY20 Results: Summary
Q4 FY20 Results: Summary (in millions, except per share amounts) Q4 2020 Q4 2019 Total Sales $ 1,570.0 $ 1,730.2 Total Segment Operating Earnings $ 317.9 $ 349.0 Purchase Accounting Depreciation and Amortization (11.3) (4.1) General Corporate - Net (22.0) (36.4) Non-operating pension and postretirem
Slide 22: Free Cash Flow
Free Cash Flow (in millions) Q4 2020 FY 2020 Net Income $ 264 $ 1,023 Depreciation/Amortization 45 173 Retirement Benefits Expense 35 130 Receivables/Inventory/Payables 78 16 Compensation and Benefits 8 (45) Pension Contributions (59) (84) Income Taxes 4 (78) Change in fair value of investments1 (52
Slide 23: Industry Segmentation
Industry Segmentation % of FY20 Sales Discrete Hybrid Process ~10% Automotive ~20% Food & Beverage ~10% Oil & Gas ~5% Semiconductor ~5% Life Sciences ~5% Mining, Aggregates & Cement ~5% General Industries ~5% Household & Personal Care ~5% Metals • Warehousing & E-commerce ~5% Tire ~5% Chemicals • Pr
Slide 24: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2020 2019 Reported Sales Currency Organic Effect of Growth Acquisition Growth Growth Effect of Changes in Organic (Decline) Growth (Decline) (Decline) Sales(a) Acquisitions(e)1 Curren
Slide 25: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Organic Sales (in millions, except percentages) Three Months Ended September 30, 2020 2019 Sales Currency Organic Effect of Growth Acquisition Growth Growth Effect of Changes in Organic (Decline) Growth (Decline) (Decline) Sales(a) Acquisitions(e)1 Currency(d) Sal
Slide 26: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Segment Operating Margin (in millions, except percentages) Three Months Ended Twelve Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Sales Architecture & Software (a) $ 702.8 $ 781.2 $ 2,832.9 $ 3,021.9 Control Products & S
Slide 27: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate (in millions, except per share amounts) Three Months Ended Twelve Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Net Income attributable to Rockwell Automation
Slide 28: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Return On Invested Capital ($ in millions) Twelve Months Ended September 30, 2020 2019 (a) Return Net income $ 1,023.2 $ 695.8 Interest expense 103.5 98.2 Income tax provision 112.9 205.2 Purchase accounting depreciation and amortization 41.4 16.6 Return 1,281.0 1
Slide 29: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Logix Sales Growth Three Months Ended Twelve Months Ended September 30, 2020 September 30, 2020 Logix Logix reported growth (12.6) % (7.3) % Effect of currency translation — % 1.2 % Logix organic growth (12.6) % (6.1) % Control Products & Solutions Sales Growth Th
Slide 30: New Definition of Adjusted Income and Adjusted EPS
New Definition of Adjusted Income and Adjusted EPS ▪ Beginning in fiscal 2021, Rockwell is changing its definition of Adjusted Income and Adjusted EPS ▪ New definition will also exclude the impact of purchase accounting depreciation and amortization expense attributable to Rockwell Automation and th
Slide 31: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Fiscal 2021 Guidance (in billions, per share amounts) Organic Sales Fiscal 2021 Guidance Organic sales growth 3.5% - 6.5% Inorganic sales growth 1.0% - 1.5% Foreign currency impact ~ 1% Reported sales growth 6% - 9% Segment Operating Margin Total sales (a) $ ~ 6.8
Slide 32: Thank you
Thank you www.rockwellautomation.com 32